Facts of the case:
Raja Benoy Kumar Sahas Roy V. C.I.T
- Here Respondent owns 6000 acres of forest of sal and piyasal trees.
- The forest was of spontaneous growth and it was 150 years old.
- Respondent used to sell those trees and income was generated from that
- Here, Respondent say that generated income is agricultural income and
this is exempted under sectin 10(1) of taxation act therefore their should
be no income tax imposed on it.
- But the income tax officer rejects his plea and he does not consider it
as a agricultural income and he deducts the expenditure required on
maintaining the forest.
- Respondent is not agreed by the decision of income tax officer he went
to Appellate Assistant Commisnor and Appellate Tribunal.
- The Appellate Tribunal held that the sowing of seeds were few and far
between and the income , derived as it was from jungle and considered as
jungle products so it was not considered as agricultural income under this
- After going through all the facts of the case both Appellate Assistant
Commissoner and Appellate Tribunal agree with Income Tax Officer.
- Then the case was transfered to High Court.
Citation: 1957 AIR 768 1958 SCR 101
Contentions of the Respondent
- Whether on the facts and circumstances of the said income is agriculture
income or not?
He said that he had hired staff for the specific operations like:
- Cutting of channels to help the flow of rain water.
- Protecting the trees against pests and other destructive elements.
- Sowing of seeds after digging of the soil in denuded areas.
Here Respondent said that process he performed on land were agricultural
operations,so the income is agricultural income.
Here Tribunal found that employment of human labour skill mentioned in (a) to
(f) was necessary for the maintainence of the forest and clause (g) was
performed on small fraction of area where the original growth have been
Appellate Tribunal was of opinion that income was generated from spontaneous
land which is jungle and is not consider under section 2(1) of the act.
With attatched facts of the case and the statement of the case Tribual referred
the case to High Court.
High Court Decision
High Court said according to income tax act land which has spontaneous growth
will not come under agricultural income.
According to Income Tax act agriculture is defined in section 2(1)(a) which
considers four categories:
- Rent or Revenue
- Agricultural situated in India
- Agricultural Purpose
- Income must be directly associated with the land.
High Court stated the difference of agriculture and agriculture purpose with the
reference of land as the court said income to be called as agricultural income
some basic operation needs to be conducted and human skill and labour should be
implied to that part not for any basic care like weeding or preservation of
High Court even said that for any cultural activity it is important that there
should be basic operation like tilling of the land, sowing of the seeds,
planting etc is necessary to establish an activity as an agricultural operation.
Even High Court said that mere subsequent activity like weeding ,felling,
cutting and guarding cannot be constituted as agricultural income.
Even High Court said that this forest is 150 years old, so it is difficult to
say that every tree in this forest was planted by Respondent.
With this High Court agree with the Appellate Tribunal and does not consider
Respondent income as agricultural income.
Supreme Court Decision
According to Supreme Court agriculture means when labour and skill of man has
been operated on land for the growth of certain products.
In this case income is derieved from the natural growth of the land though it is
generated from land but not from agricultural process.
On the facts of the case Judges said that if forest of spontaneous growth was
taken and land was regularly cleared and proper nourishment and moisture would
have been performed and even subsidiary arrangement would have been conducted
for the protection of trees then it could have been said that income generated
was agricultural income.
But going through the case court noticed that only subsequent operation was
performed and subsequent operation performed without basic operation was not
consider as agricultural income.
Supreme Court agreed with the decision of the High Court that the forest is 150
years old and every tree was planted by respondent was difficult to figure out
so the judgement given by the Appelate Tribunal as well as High court was
justified and the judgement given by them was not wrong.
So, Supreme Court dismissed the appeal with costs.